Today's Must Read
AstraZeneca (AZN) New Drugs to Drive Sales Amid Generic Woes
Enbridge's (ENB) C$22B Project Backlog to Offset Debt Load
Friday, August 17, 2018
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Cisco Systems (CSCO), AstraZeneca (AZN) and Enbridge (ENB). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Cisco's shares have outperformed the Zacks Computer Networking industry year to date, gaining +17.9% vs. +16.5%. Cisco is an IP-based networking company that reported stellar fourth-quarter results. Also, both revenues and earnings increased year over year.
Strength witnessed in company’s Security and Applications segments drove year-over-year growth. Order strength and improving traction of the subscription-based model were other tailwinds. Strong contribution from acquisitions, security, Infrastructure Platforms and applications remains a positive.
A strengthening collaboration portfolio, which now includes Webex Teams and AI-based Accompany bodes well. Partnerships with Telenor, Apple, IBM, Microsoft and Google Cloud are positive. Divestiture of a portion of Cisco’s NDS video assets is likely to mitigate the sluggishness witnessed in other product segment.
However, weakness in switching and routing is a headwind. Ongoing transition to subscription-based model will continue to hurt the top line.
AstraZeneca’s shares have gained +9.4% year to date, outperforming the Zacks Large Cap Pharmaceuticals sector which has gained +3.9% over the same period. AstraZeneca beat estimates for both earnings and sales in Q2. Its core products like Nexium, Crestor and Seroquel are facing generic competition, which is hurting sales.
The diabetes franchise also faces stiff competition while pricing pressure is hurting sales in the Respiratory franchise. Nonetheless, AstraZeneca is one of the key players in the global cardiovascular market. AstraZeneca’s newer drugs like Lynparza, Tagrisso and Brilinta should keep contributing to revenues.
Several launches are underway across each of the therapeutic areas, Oncology, CV metabolism and Respiratory. Meanwhile, cost-cutting efforts should drive earnings. AstraZeneca also has a promising late-stage pipeline that includes immuno-oncology candidates. Imfinzi is a key drug in the pipeline. AstraZeneca announced quite a few positive developments on the regulatory and pipeline front this year.
Shares of Enbridge have declined -11.4% over the past year, underperforming the Zacks Oil Production and Pipeline industry’s loss of -4% during the same period. Enbridge has the longest and most sophisticated crude and liquids pipeline system in the world that spreads over 17,018 miles.
The Zacks analyst appreciates the merger with Spectra Energy as it has made Enbridge the largest North American energy infrastructure player. The company’s huge backlog of growth projects that stands at roughly C$22 billion along with the C$12 billion worth midstream projects that are online will help it drive dividend by 10% annually through 2020.
Enbridge’s second-quarter 2018 earnings and revenues increased year-over-year, owing to higher throughput volumes from the Canadian Mainline and Lakehead System along with higher income from all of the company's business units and synergy benefits from the acquisition of Spectra Energy. However, the firm’s significant exposure to debt is a matter of concern.
Other noteworthy reports we are featuring today include Lockheed Martin (LMT), Marathon Petroleum (MPC) and SAP SE (SAP).
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Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>